Summary
Okta's first quarter of fiscal 2027 showed steady top-line growth and wider profitability. Total revenue was $765 million, up 11.2% from the prior-year quarter. Gross profit was $595 million, up 11.6%, and gross margin was 77.8%, up 0.3 percentage points. Operating income was $56 million, up 43.6%, and operating margin was 7.3%, up 1.7 percentage points. Net income was $74 million, up 19.4%, while diluted EPS was $0.42, up $0.07. Management credited go-to-market specialization for tangible results, including continued strength with large enterprises and increased sales productivity.
Cash generation remained a strength. Operating cash flow was $277 million, up 14.9%. Capital expenditures were $1 million, flat. Free cash flow, a non-GAAP measure, was $271 million. Backlog expanded. Remaining performance obligations were $4.72 billion, up 15.5%. Current remaining performance obligations were $2.499 billion, up 12%. Deferred revenue, current portion, was $1.73 billion, up 10.7%. Okta ended the quarter with 5,180 customers that have annual contract value above $100,000, compared with 4,870 a year earlier. The dollar-based net retention rate for the trailing 12 months was 107%, compared with 106%. The company also highlighted Okta Identity Governance as a product that validates its unified identity platform strategy.
Non-GAAP results and guidance frame the outlook. Non-GAAP operating income was $191 million, or 25% of total revenue, compared with $184 million, or 27%, in the first quarter of fiscal 2026. Non-GAAP net income was $168 million, and non-GAAP diluted EPS was $0.91. For the second quarter of fiscal 2027, Okta guides to revenue growth of 9% year over year. It also guides to current RPO of $2.505 billion to $2.515 billion, growth of 11%; non-GAAP operating income of $204 million to $208 million, a 26% non-GAAP operating margin; non-GAAP diluted EPS of $0.95 to $0.97; and non-GAAP free cash flow of $155 million to $165 million, a 20% to 21% free cash flow margin. For the full fiscal year 2027, the company now expects revenue growth of 9% to 10%. Full-year non-GAAP operating income is guided to $806 million to $826 million, a 25% to 26% non-GAAP operating margin. Full-year non-GAAP diluted EPS is guided to $3.79 to $3.87, and full-year non-GAAP free cash flow is guided to $855 million to $885 million, a 27% to 28% free cash flow margin. The full-year revenue outlook includes an approximately one percentage point impact from accelerating the shift of professional services business to partners. The free cash flow outlook includes an approximately one percentage point impact from lower interest income tied to the stock repurchase program and the intent to settle the remainder of the 2026 Notes in cash. The guidance assumes a non-GAAP tax rate of 21% and diluted weighted-average shares outstanding of approximately 184 million for both the second quarter and the full year.
Management points to AI agents and non-human identities as a growing source of new identities to secure. The company is expanding its platform to govern those identities alongside human users. Still, the quarter carries risks. Okta faces macroeconomic and political uncertainty, including tariffs, changing interest rates, inflation, and changes in government spending levels. Longer sales cycles have affected the business and could pressure cash flow, RPO, and current RPO growth. Professional services revenue is expected to decline as more engagements move to partners. The company also flags cybersecurity incidents as a reputational and financial risk. It continues to maintain a full valuation allowance on U.S. deferred tax assets. The One Big Beautiful Bill Act led to a lower projected non-GAAP tax rate of 21%, down from 26%. Competition and execution on go-to-market specialization remain important variables for the rest of fiscal 2027.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2027 | Q4 FY2026 | QoQ | Q1 FY2026 | YoY |
|---|---|---|---|---|---|
| Revenue | $765.0M | $761.0M | +0.5% | $688.0M | +11.2% |
| Gross profit | $595.0M | $593.0M | +0.3% | $533.0M | +11.6% |
| Gross margin | 77.8% | 77.9% | -0.1 pp | 77.5% | +0.3 pp |
| Research & development | $163.0M | $165.0M | -1.2% | $154.0M | +5.8% |
| Sales & marketing | $278.0M | $264.0M | +5.3% | $237.0M | +17.3% |
| General & administrative | $98.0M | $114.0M | -14.0% | $103.0M | -4.9% |
| Total operating expenses | $539.0M | $547.0M | -1.5% | $494.0M | +9.1% |
| Operating income (loss) | $56.0M | $46.0M | +21.7% | $39.0M | +43.6% |
| Operating margin | 7.3% | 6.0% | +1.3 pp | 5.7% | +1.7 pp |
| Net income (loss) | $74.0M | $63.0M | +17.5% | $62.0M | +19.4% |
| Net margin | 9.7% | 8.3% | +1.4 pp | 9.0% | +0.7 pp |
| Diluted EPS | $0.42 | $0.35 | +$0.07 | $0.35 | +$0.07 |
| Net retention rate | 107.0% | 106.0% | +1.0 pp | 106.0% | +1.0 pp |
Risks
MD&A states future growth may be impacted by longer sales cycles that the company has experienced, which could delay deals closing and create near-term headwinds for cash flow, RPO and current RPO growth, with potential trailing impacts on revenue growth and other key metrics.
MD&A notes past cybersecurity incidents, including the January 2022 third-party service provider incident and the October 2023 third-party customer support system breach, harmed reputation and customer relations and adversely impacted financial results, and the company expects these incidents to adversely affect future financial performance.
MD&A highlights worldwide economic and political uncertainties, including financial and credit market fluctuations, tariffs and increasing trade protectionism, changes in government spending levels, banking sector uncertainty, changing interest rates and inflation, that have and could continue to adversely affect business operations or financial results.
Interest and other, net decreased 25% for the three months ended April 30, 2026 compared to the prior-year period, primarily due to lower interest income, and MD&A expects interest income to decrease in fiscal 2027 as cash is deployed to fund the Share Repurchase Program and settle the 2026 Convertible Senior Notes obligation.
MD&A states professional services and other revenue is expected to decline as more engagements shift to the partner ecosystem, and gross margin for professional services and other revenue decreased to (33)% for the three months ended April 30, 2026 compared to (27)% for the prior-year period due to higher labor costs.
As of April 30, 2026, the company continues to maintain a full valuation allowance on its United States deferred tax assets; a release may occur in the foreseeable future but the exact timing and amount remain uncertain and depend on actual profitability.
SaaS KPIs
All quarters →Remaining Performance Obligations (RPO)
Current Remaining Performance Obligations (cRPO)
Free Cash Flow Margin
Free Cash Flow
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Non-GAAP Operating Income
Customers with Annual Contract Value Above $100,000
Summary, forecast, risks and KPIs are extracted from Okta, Inc.'s SEC filings for Q1 FY2027 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.